SBI and LIC's Rural Connect

Some financial companies (Shadow Banking) responsible for the problem of NPAs in the banking sector are at risk of sinking. Infrastructure Leasing and Finance Services (IL & FS - IL & FS) is a major shadow banking company in the country and 91,000 crores of many legendary banks in the country are owed to the company. Banking industry experts claim that the Reserve Bank of India can cancel licenses of about 1,500 (Shadow Bank) non-banking financial companies in the country. These Shadow Banks do not have adequate capitals. Apart from this, the Reserve Bank is looking to make the process of getting a new license of Shadow Banking in the country.

Significantly, in the last few days, the Reserve Bank has been strictly against non-banking finance companies. Experts believe that such non-banking financial services company will eliminate the small financial services companies in the country at such a time. Experts also believe that due to the ongoing problem in the Shadow Banking sector, the country can face difficulties in taking small loans in rural areas. Significantly, about two-thirds of the country's 130 million population is in rural areas.